Zillow Group came out swinging against a new listings database backed by the National Association of Realtors — telling federal regulators that it was “greatly concerned” by NAR’s purported attempt to control listings data.
The criticism was part of written testimony that Zillow submitted this week in connection with a June 5 workshop on real estate competition, which was convened by the Federal Trade Commission and Department of Justice. Zillow’s seven-page letter contained what may be its sharpest criticism yet of NAR’s centralized database, dubbed Upstream.
“Ostensibly, the goal of Upstream – an industry consortium of would-be competitors aiming to consolidate data in one place – is to address data input inefficiencies,” Zillow wrote. “However, members of Upstream’s board have repeatedly commented in public settings and in written communications that one goal of Upstream is to allow brokers to restrict data distribution to online portals.”
Upstream, a multi-million-dollar project spearheaded by NAR, launched this spring after reported cost-overruns and delays. NAR touts the system as a way to ensure data accuracy and consistency, but Upstream has been a lightning rod for criticism and misunderstanding not just by Zillow but also by local MLS systems wary of being phased out.
Zillow’s testimony argued that “unreasonable restrictions” on sharing and distributing data are bad for consumers and brokers. It also predicted that smaller brokers would be disproportionately impacted by restrictions on data sharing, and that a national database of listings controlled by large brokerages could lead to the “erosion of data access” for consumers.
In its own testimony, NAR argued that listing agents should control distribution.
“Real estate brokers and agents invest resources into obtaining property listings,” wrote NAR, which counts 1.3 million real estate agents as members. As such, NAR said agents have “rights and responsibilities to control the distribution of their listings.”
Any “appropriation of a commercial entity’s data, work product, or intellectual property for exploitation by another commercial entity is not justified,” NAR added.
But while Zillow argued for the “democratization” of data, NAR said calls for greater access to MLS data are “based on faulty expectations that unrestricted access to listing data will help consumers.” Instead, NAR said, “forcing brokers to provide unrestricted access to proprietary MLS information can alter important incentives for the creation of listing information.”
Zillow’s testimony also took aim at the California Association of Realtors, which, like other associations, has a series of forms that agents use to submit offers. CAR only licenses its forms to zipLogix, a digital transaction company partially owed by CAR and NAR. “After nearly three years of requests, CAR continues to refuse to negotiate with us,” Zillow wrote.
CAR maintains that it has copyrighted the forms to ensure they are “authentic” and “up to date.”
“Some have suggested…. that protecting one’s copyrights from infringement somehow impairs competition,” CAR wrote. “Any such argument that competitors should be free to poach the patents, copyright and trademarks of others in the name of ‘free competition’ must be addressed [by] Congress.”